The Day at a Glance | October 27 2022

*ECB increased interest rates in 75bp and set them at their highest levels since 2009.

*US GDP growth exceeded estimates in the 3Q22 (2.6% annualized vs 2.4%e.).

*Mexico´s exports increased 4.98% in September (25.4% annual), imports decreased 0.67% (20.8% annual) and logged a trade deficit worth 895 million dollars.

*Xi Jinping assured that China is willing to cooperate with the United States; he will meet with Biden in the G-20 summit.

*Consumer confidence in the US fell to its lowest level in 3 months (CB index 102.5).

*France and Germany prepared a plan to protect and boost European electric vehicle makers.

*IMF confirmed 3 billion dollar loan to Egypt.

Economic environment

Interest rates increased in Europe. The European Central Bank decide to increase interest rates in 75bp and set them at their highest levels since 2009. This is the third consecutive meeting in which rates were increased – and the second 75bp increase – as the ECB continues fighting inflation in Europe. The deposits rate set at 1.5% and expects it to reach 2.5% in March of 2023. The refinancing rate and the marginal lending facility set at 2% and 2.25%, respectively. In its press release, the ECB pointed out that it will continue carrying out interest rate increases to ensure inflation returns to 2%, but will continue reinvesting in European debt markets as the assets in its balance sheet reach their maturities. Additionally, it modified the rules of its long term loan program (TLTRO) to incentivize timely payment of loans granted to banks. The press release was concise, although much more detail is expected to be given in Christine Lagarde´s press conference.